The Business Beat
By Daniel Huot
On-line commerce, or e-commerce, is a booming business.
Last year the Canadian Bankers’ Association estimated on-line commerce to be worth at least $33.5 billion U.S. Some companies even expect it to reach $435 billion U.S. by 2002.
But only 10 per cent of those actually logging onto the Internet purchase anything. Many don’t have a credit card, and others don’t want to give their credit card numbers to companies they have never encountered
Although the number of credit cards issued increased to 31 million in 1997 from roughly 20 million in 1989, credit card frauds have skyrocketed to 90,000 in 1997 from 31,000 in 1989. That equals a 300 per cent increase in crime compared with a 30 per cent increase in the number of cards issues.
Under seven per cent of last year’s credit card frauds were committed without card theft by duping customers into revealing their numbers.
Canadian banks have been taking the matter seriously and have been trying to develop a safer product for on-line shopping. That’s why the Royal Bank, the Bank of Montreal, the Canadian Imperial Bank of Commerce (CIBC), the Bank of Nova Scotia, the Mouvement des caisses populaires Desjardins, Canada Trust, the National Bank of Canada, and Credit Union Central of Canada have all endorsed smart cards recently.
They are being looked upon as the future tool for on-line and ordinary shopping. Smart cards are neither credit nor debit cards, but electronic purses.
You can download a fixed amount of money from your bank account onto your smart card and not worry about your savings going up in smoke if you lose it.
Instead of withdrawing $100 from a cash machine with a debit card, you can simply download $100 onto your smart card’s micro-chip and not carry any coins in your wallet. You can purchase goods in almost the same manner as a debit card, without having to worry about spending too much.
Only Mondex, an affiliate of MasterCard, and Visa Cash offer smart cards. Until recently, smart cards have been used in a pilot project in Guelph. Lately the Royal Bank opened two Mondex friendly facilities in Toronto, indicating the system’s expansion.
Once smart cards function over the Internet, you won’ t have to worry about thieves stretching your credit limit. With five different downloadable currencies, you’ll be set for global shopping.